Major achievement
The Electricity Act 2003 was enacted with the objective of encouraging competition, access to electricity and to protect consumer’s interests. From the Electricity Act 2003, the National Electricity Policy was developed in 2005 with the following aims and objectives:

• “Access to Electricity - Available for all households in next five years
• Availability of Power - Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning reserve to be available.
• Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates.
• Per capita availability of electricity to be increased to over 1000 units by 2012.
• Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.
• Financial Turnaround and Commercial Viability of Electricity Sector.
• Protection of consumers’ interests.” (11)

The private sector has responded positively to opportunities presented in the Electricity Act 2003 and have become actively involved in the transmission sector. Many State Electricity Boards have also undergone privatization and it is expected that these efforts will continue.

Major challenges
The major challenges facing the Indian power sector is inadequacy of supply to meet the growing demand leading significant power shortages. Inefficient use, transmission and generation of electricity exacerbate this problem. Losses from the electricity system were about 31 per cent between 2004 and 2005 (12). The power sector also suffers from financial constraints, particularly related to cross-subsidization. (13)

By 2010, India aims for total household electrification with an investment of US 11 billion dollars. By 2011, India plans to eliminate 8-12 per cent of the electricity shortage, and by 2032, increase its capacity to 800 GW. Through these targets, the generation capacity is expected to double every 10 years (14).

Rural electrification
Providing electricity for all is a high priority of the Government of India, as stated in their 2005 National Electricity Policy. In this regard, the Ministry of Power has introduced a scheme in 2005 known as the Rajiv Gandhi Grameen Vidhyutikaran ojana (RGGVY) with the aim of providing electricity to all villages and habitations within four years and widening the access to electricity to all rural households.
 
This initiative will include a mixture of grid extension and stand-alone facilities with the ultimate goal of rural development, employment and poverty alleviation through meeting the requirements of agriculture and industries, healthcare, education and IT. Subsidies for 90 per cent of the capital expenditure will be provided under this scheme, with 100 per cent of the capital financed to un-electrified rural households below the poverty line financed (15).

Environmental Management
The Government of India has undertaken a number of initiatives to minimize the impact of the power sector on the environment. In addition to those activities to mitigate carbon emissions, an action plan has been developed for the use of flyash in building products. About 90 million tonnes of flyash is produced as a waste from coal-based power stations each year. It was found that flyash displays superior strength and is more durable than many other products utilized in building and construction, and therefore the Government is recommending its use in building products including cement, roads, bricks and floor tiles.

To improve the environmental performance of coal based power stations, the National Thermal Power Corporation has 18 of its power stations ISO14000 accredited. ISO 14000 is an international certification standard for environmental management systems. A number of other initiatives have been undertaken to improve the efficiency of power generation and the use of clean coal technology is being investigated (16).

Climate change
It has been estimated that the Indian power sector emitted almost 527 million tonnes of greenhouse gases in 2004. As highlighted in the regional overview at the beginning of this publication, this amounts to approximately 9 per cent of the global emissions. Some activities to help reduce greenhouse gas emissions from India include improving the supply and demand-side efficiency and expanding the use of renewable energy resources.

A Special Purpose Vehicle for Afforestation has also been approved to increase the forest cover and undertake other measures to reduce carbon dioxide emissions.

The Ministry of Power is working with other organizations to take advantage of the Clean Development Mechanism to reduce greenhouse gas emissions. India has also had a number of Clean Development Mechanism projects approved, primarily relating to small hydropower units (17).

Efficiency measure (18)
The Energy Conservation Act (2001) was enacted to reduce energy consumption and enforce demand side management to reduce the need to install new capacity (19).

The Bureau of Energy Efficiency was created under the Ministry of Power with the mission to “'institutionalize' energy efficiency services, enable delivery mechanisms in the country and provide leadership to energy efficiency in all sectors of the country"(20). The main activities of this organization include energy efficient building codes, standards and labelling, industrial energy efficiency, demand side management and education, research, accreditation of professionals and the development of codes.

The Ministry of Power has also proposed the establishment of five Regional Energy Efficiency Centres with the purpose of acting as an information resource centres which facilitates the application of energy efficiency through demonstrations, showcases and education. The Centres will also facilitate market transformation and business growth through energy efficiency initiatives, and encourage research and collaboration (21).

Renewable Energy (22)
The Ministry of New and Renewable Energy is the primary government body responsible for widening the use of new and renewable energy sources in India.
In addition to its ongoing programmes for specific renewable energy infrastructure, The Ministry of New and Renewable Energy has provided guidelines to states to encourage the commercial development of a renewable energy industry. (23)

Stakeholders

Central Electricity Authority
Central Electricity Regulatory Commission
Ministry of Power
Indian Renewable Energy Development Agency
Ministry of New and Renewable Energy Government of India
Bureau of Energy Efficiency

(11) Ministry of Power, Government of India, http://powermin.nic.in/JSP_SERVLETS/internal.jsp, accessed in September 2007
(12) Ministry of Power, Government of India, All India Electricity Statistics General Review 2006, (2006).
(13) Ministry of Power, Government of India, http://powermin.nic.in/whats_new/national_electricity_policy.htm, accessed in September 2007
(14) Presentation by Mr. Sudhaker Shukla, Ministry of Power, Government of India, at Expert Group Meeting on “Sustainable Development Indicators for the Power Sector”, July 2007
(15) Ministry of Power, Government of India, http://powermin.gov.in/bharatnirman/bharatnirman.asp, accessed in September 2007.
(16) Ministry of Power, Government of India, http://powermin.nic.in/JSP_SERVLETS/internal.jsp, accessed in September 2007.
(17) Institute of Global Environmental Strategies (IGES), 2007, IGES CDM Project Database, http://www.iges.or.jp/en/cdm/report.html, accessed in August 2007.
(18) Winrock International India, newsletter article Strategic Vision for energy efficiency in India, establishing centers of excellence, August - October 2006, vol. 7, Nos. 1-2, accessed from http://www.renewingindia.org/newsletters/bee/current/bee_oct_12_06.htm in September 2007
(19) Ministry of Power, Government of India , http://powermin.nic.in/JSP_SERVLETS/internal.jsp, accessed in September 2007
(20) Bureau of Energy Efficiency, http://www.bee-india.nic.in/aboutbee/Mission%20&%20objectives.html accessed in September 2007.
(21) Winrock International India, newsletter article Strategic Vision for energy efficiency in India, establishing centers of excellence, August - October 2006, vol. 7, Nos. 1-2, accessed from
(22) Institute for the analysis of global security, article India’s Energy Security Challenge, January 2004, http://www.iags.org/n0121043.htm, accessed in September 2007.
(23) Ministry of New and Renewable Energy Government of India, http://mnes.nic.in/frame.htm?majorprog.htm, accessed in September 2007.